Black & Decker Robotic Vacuum Cleaners

Brett Hollenbeck and Robert Zeithammer1

In early 2016, Rebecca Cunningham – a Senior Market Research Manager at Black & Decker –
was trying to answer the following questions for the senior management of Black & Decker
Corporation: Should Black & Decker enter the growing category of robotic vacuum cleaners
pioneered by Roomba? If yes, then what kind of product should Black & Decker enter with, and
how should they market it? On one hand, robotic vacuums seemed like a natural progression
from B&D’s existing vacuum business, and a potential success akin to Black & Decker’s
Dustbuster subbrand. On the other hand, Rebecca was not sure how strong B&D’s brand would
be in the crowded field of robotic vacuum competitors, and what specific market niche would be
a good fit for B&D. Since its acquisition of General Electric’s small appliance business in 1984,
Black & Decker has successfully expanded “from the garage into the home” 2, offering not only
its iconic power tools, but also toasters, coffee makers, and vacuum cleaners. A failed entry into
a technologically challenging market could hurt the entire brand.

Rebecca assembled a team of market researchers, and set out to identify the appropriate
marketing mix for a technologically advanced vacuum cleaner. The specifications made it clear
that the new vacuum cleaner would be remote control operated with a "self-drive" mode which
would allow it to clean autonomously without human control. Further design details were
completely up to the team.

Black & Decker

In 1910, Duncan Black and Alonzo Decker, Sr., started a machine shop and they received a
patent on the world’s first portable power drill with pistol grip and trigger switch in 1917. After
dominating that market, B&D has famously built on technology to developed for NASA when it
launched the portable, cordless, handheld DustBuster vacuum cleaner in 1979. DustBuster,
1
Both at UCLA Anderson School of Management. This case is loosely based on the 2016 Sawtooth Software
Analytics Challenge, which featured Black & Decker as a sponsor. The authors acknowledge excellent assistance by
Kalyan Rallabandi and survey design and implementation by the student team representing UCLA Anderson at the
Analytics Challenge.
2
Al Silk (2006), “What is Marketing?”. Harvard Business School Press.

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helped B&D maintain a sizable share of the cordless vacuum cleaner market and continued to
evolve through redesigns and improved product features and even as recently as 2016 the name
DustBuster was synonymous with handheld vacuum cleaners among American consumers.
Given their expertise honed on the DustBuster, Black & Decker engineers had the capability of
developing a battery-powered vacuum cleaner.

Robotic Vacuums
In 2002, iRobot launched its very successful Roomba floor vacuuming robot, which captured the
consumers’ imagination. While designed primarily for the upwardly mobile consumers, Roomba
became such a success that major specialty retailers, as well as more than 4,000 outlets such as
Target, Kohl's and Linens 'n Things, began to carry the Roomba. After enjoying a decade long
early mover’s advantage, by 2014 Roomba started facing competition when Dyson launched the
Dyson 360 Eye, equipped with a 360-degree camera mounted on the top of the robot vacuum
cleaner and which provided a better navigation. The market continued to evolve with new
launches by many established and new brands. The competitive landscape, as of 2016 in depicted
in the exhibits at the end of the case. By 2016, B&D has clearly fallen behind competitors in the
robotic vacuum market because it offered no such products.

The household robotic vacuum industry is poised for exceptional growth over the next ten years.
Robotic vacuums are part of a larger, global robotic cleaning industry that is expected to grow to
$6 billion by 2024 at a CAGR of 25% from 2019-2024. Within this market, robotic vacuums are
expected to grow at ~15-17% CAGR until 2019. During that time, growth in U.S. is expected to
be at ~9-12% CAGR. In the U.S., robotic vacuums represent ~18% of the $2.3 billion total
vacuum market of units over $200. Household robotic vacuum sales in 2014 exceeded $670
million in the U.S. where iRobot dominated the home robotic vacuum market with 65-70%
market share in the U.S. with their Roomba products. Other brands in the robotic vacuum market
include Neato, Samsung, LG, Infinuvo and Dyson, which is expected to launch in the U.S. later
in 2016.

Robotic Vacuum Product Landscape

As complicated as the name “Robotic Vacuum” may seem, the different product offerings are
readily described by product features the translate to consumer benefits. For example, the
available variants of the robotic vacuums differed in their vacuuming patterns. The patterns

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included among others, Random, Spiral/grid, human-like back-and-forth, wall hugging. Some
even allowed selection from multiple patterns (Please see the exhibit below). Beyond patterns,
robotic vacuums were characterized by a variety of product features, some of which included:

1. Navigation Technology – which varied between none and Random Pattern for
vacuuming. A few featured smart navigation, i.e. able to visually scan and map
room/obstacles, while others could map virtual borders
2. Types of Floor Surfaces – the vacuum’s ability to handle Hard Wood/Tile, Short Pile
Carpet/Berber, Long/Cut Pile Carpet, etc. Conventional vacuums had a similar feature.
3. Battery Life / Task Completion – the available products had a variety of battery life
options from 20 minutes (Dyson) to up to 2 hours (Roomba). The real issue that this
feature highlighted was the ability to complete cleaning tasks, i.e. can the machine finish
the task on one charge. When the battery dies or is about to die, would human
intervention be needed or would the vacuum be smart enough to return to the charger and
self-charge.
4. Charge Time – 2 to 5 hours
5. Features to Avoid Getting Stuck – this included robust wheels, Low profile, wider
beater bar gave more “oomph”, visually detect obstacles, etc
6. Ability to schedule cleaning – products which had this feature had to be programmed
either on-unit or could be programmed to do so remotely (and on unit)
7. Able to monitor remotely through app

Gaps in existing Features

While the products available in the market had an extensive set of features, qualitative research
by firms pointed to potential areas of frustration that existing users of robotic vacuums faced.
These included:
• Suction / Performance on carpet
• Cleaning the beater bar a hassle or gross
• Robots don’t clean along an edge or in corner well
• Emptying the dust bin was messy and sometimes users had to touch the debris
• Got stuck under furniture, on threads/blankets/towels/socks, high rugs or where floor
transition was too high, cords from shades/blinds, electrical cords, or gets caged-in.
Often users had to “rescue” the robot before task completion
• Price
• Noise
• Can scare pets and/or kids
• Can’t avoid or clean “wet” messes

Entry Threats and Decision

Many established players in the vacuum industry have either entered the robotic vacuum market
by 2016, or contemplated an entry alongside B&D (please see exhibit below). This was a recipe
for a very competitive market landscape. Given this background, the marketing research team at

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B&D had to carefully consider competition in its research design, and position the new product
where B&D had a competitive advantage. Rebecca Cunnigham decided to look at the customer
decision making process, and identify actionable customer segments. Given a target segment, she
would then position the new B&D robotic vacuum to ensure that consumers in the target
segment perceive the unique value that only B&D robotic vacuum can offer. The marketing
strategy (segmentation, targeting, and positioning) would hopefully clearly imply a marketing
mix, right from identifying the best possible combination of product features, to the price that
such a product would be sold at, and the distribution and promotional plans.

Data and Questions

Imagine your group is Rebecca Cunningham’s team. Your goal is to develop a data-driven
marketing plan for a potential launch of a Black & Decker robotic vacuum.

Your marketing plan should contain a diagnosis of the current state of the industry, a statement
of the key opportunities for increasing sales and profits, and detailed marketing strategies and
programs for achieving a successful product launch in the target market. The plan will be
delivered in a report to the marketing vice president.

As part of your research, you have conducted a large behavioral and conjoint survey of 422
potential robotic vacuum purchasers in the United States. The behavioral part of the survey asked
each respondent a variety of relevant demographic and product usage questions detailed in the
Appendix. The conjoint analysis part of the survey presented each respondent with 19 choice-
sets of three robotic vacuums and a “none of the above” option. The product alternatives were
described in terms of the following 7 attributes: Brand, Price, Suction Power, Noise Level,
Battery Life, Charging Time, and Mobile App Control (please see the Appendix for the levels of
each attribute). The answers to the behavioral questions, as well as individual partworths and
importance weights implied by the conjoint analysis are all contained in the
Robotic_Vacuum_data.xls spreadsheet.

Notes about the data in Robotic_Vacuum_data.xlsm

 The answers to the behavioral questions are coded numerically following the Appendix.

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  The partworths in cells filled with blue color are Sawtooth’s “zero-centered diffs”. The
definition of zero-centered diffs is a little different from our in-class definition of
“partworth”. Here is a primer: First, the “zero-centered” part means that for each person
and within each attribute the average level has a partworth of zero (in contrast we set the
partworth of the lowest level to zero). Second, the partworths are re-scaled within each
person so that the average (across attributes, within person) range of partworths within an
attribute is 100. It is reasonable to cluster people based on their zero-centered diffs.
Please see the Appendix for more details.
 The partworths labeled “raw utilities” are the multinomial logit coefficients

Please structure your marketing plan along the 3C-STP-4P framework. Specifically, start with a
brief overview of Company (what is B&D’s competitive advantage? What are its weaknesses?),
Competition (who are the most important competitors and their strengths and weaknesses?), and
Customer (trends in the market). You may also want to discuss the presence of barriers to entry,
or how nimble competitors are likely to be in responding to your company’s actions, if these
issues are relevant to you.

After setting the stage with the 3Cs, develop a Marketing Strategy. Specifically, explain in detail
how you segmented the market, which segment you decided to target (and why), and how you
plan to position the product in the mind of the target segment customers. This analysis should
rely heavily on the survey data provided to you. Provide a positioning statement that will serve
as a blueprint for implementing your strategy.

Finally, use your Marketing Strategy developed above to inform all your tactical decisions: what
features should B&D include in their robotic vacuum(s)? and What price(s) should they charge?
How should they distribute the product? How should they promote the product? Ideally, sketch
an advertisement and include a slogan that implements your positioning in light of your other
tactics.

Throughout this analysis, make sure that your value proposition is clear, and – above all – that
each part of your analysis is consistent with the rest of plan. That is, be wary of giving each
member of the group different tasks, and merging everything at the end. Delegation is ok, but
make sure the project is integrated and all of the pieces fit together. Further, it is important that
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you support your arguments with data and evidence. Try to analyze customers as in-depth as
possible. The most effective marketing plans are usually grounded in solid customer analysis.

EXHIBITS

P3 P4960 V- iTouchless bObsweep Moneual Bissell Neato iRobot iRobot Neato

Bot Robotic Robotic PetHair RYDIS H68 1605 XV-21 Pet & Roomba 650 Roomba Botvac D75
Vacuum Intelligent Robotic Pro $249.00 Allergy $399.00 - 770 $399.00
Cleaner Vacuum Vacuum RoboVacMo Random $289.00 – 439.00 $449.00 Mapping
$87.00 Cleaner Cleaner and p Hybrid 299.00 Smart Smart
Random PRO Mop Robot Mapping
$159.00 $219.00 - $229.00
Random $412.00 Mapping
Random

Neato Samsung iRobot iRobot Neato Samsung

Botvac D80 PowerBot 20W iRobot
Roomba Roomba Botvac PowerBot Roomba
$449.00 $499.00 870 880 Connected 30W
Mapping Mapping 980
$539.00 $645.00 $699.00 $699.00 $899.00
Smart Smart Mapping Mapping Smart

Figure 1: US Competitive Landscape

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Figure 2: Available Products (US - 2016)

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1.5
Perceptual Map of Robotic Vacuum Brands

1
0.910

0.624
0.5
0.314
0.305
0.157
0.199
0

-0.263

-0.5 -0.529

-0.760

-1

-1.5
-2 -1.5 -1 -0.5 0 0.5 1 1.5 2 2.5

Figure 3: Robotic Vacuuming Patterns

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Figure 4: Possible New Entrants (US)

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General Survey Questions
Which of the following best describes your involvement with Robotic Vacuums in your home?
1) Currently own and use a robotic vacuum
2) Used to own, but no longer use a robotic vacuum
3) Currently shopping for my first robotic vacuum
4) Might consider a robotic vacuum sometime in the next 5 years
5) Considered and rejected purchasing a robotic vacuum
6) No plans to consider a robotic vacuum

Is this your first robotic vacuum?

1) Yes
2) No

Overall, are you satisfied with your current robotic vacuum?

1) Yes
2) No

Which brand do you own currently?

1) iRobot Roomba
2) Infinuvo Hovo
3) bObsweep
4) Neato Botvac
5) Bissell SmartClean
6) Miele Scout RX1
7) Samsung POWERbot
8) Other

When do you think you’ll purchase a new robotic vacuum?

1) Within next 3 months
2) 3 to 6 months from now
3) 6 to 12 months from now
4) 1 to 2 years from now
5) More than 2 years from now
6) Never, I wouldn’t buy another

What is your age?

1) Under 18
2) 18 to 24
3) 25 to 29
4) 30 to 34
5) 40 to 44
6) 45 to 49
7) 50 to 54
8) 55 to 59
9) 60 to 64
10) 65+

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What is your gender?
1) Female
2) Male

What was your total annual household income before taxes?

1) Less than $25,000
2) $25,000 to $39,999
3) $40,000 to $59,999
4) $60,000 to $79,999
5) $80,000 to $99,999
6) $100,000 to $149,999
7) $150,000 or more

Which of the following BEST describes your primary residence?

1) Single Family Home
2) Apartment
3) Townhouse or Rowhome
4) Mobile Home
5) Other

What aspects of owning a robotic vacuum appeal to you?

1) I don’t want to spend free time cleaning
2) I just don’t have the time to clean as often I’d like
3) With kids and/or pets at home, there’s a mess all the time
4) I am a neat-freak, I want to vacuum every day

What type of floors do you/would you use a robotic vacuum on? [select all that apply]
1) Carpet
2) Hardwood
3) Tile
4) Rugs

How often do you/would you want to use your robotic vacuum cleaner?
1) Once or multiple times a day
2) Once a week
3) Multiple times per week
4) Once in two weeks or a month

Where do/would you shop for home appliances such as vacuum cleaners? [select all that apply]
1) Sears
2) Amazon.com
3) Sam’s Club
4) Lowe’s
5) Bed Bath and Beyond
6) Home Depot
7) Best Buy
8) Walmart
9) Target

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10) Macy’s 11) Costco
Who does the vacuuming in your home?
1) I do all the vacuuming
2) I do some of the vacuuming
3) I don’t do any of the vacuuming

Of these additional features listed below, please rank the top 3 that would influence your
decision to purchase a robotic vacuum. (1 being the most influential)
1) Ultra Violet (UV) Light (has ability to kill bacteria)
2) Warranty Period
3) Dust Capacity (size of dust container in vacuum)
4) Schedule Cleaning (vacuum will clean at scheduled time on its own)
5) Cliff Sensor (helps the vacuum avoid falling off stairs)

What tasks do/would you use this cleaner for?

1) I use/would use this vacuum as my primary cleaner to do all cleaning jobs
2) Only quick clean up after a mess. I have another vacuum cleaner for bigger tasks such as cleaning
rooms

When do/would you operate a robotic vacuum? [select all that apply]
1) Only when I am home
2) I'd like to schedule it for when I am not at home
3) Only when my kids are not at home
4) No preference

Which region of the country do you live in?

1) Midwest - IA, IL, IN, KS, MI, MN, MO, ND, NE, OH, SD, WI
2) Northeast - CT, DC, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VT
3) Southeast - AL, AR, FL, GA, KY, LA, MS, NC, SC, TN, VA, WV
4) Southwest - AZ, NM, OK, TX
5) West - AK, CA, CO, HI, ID, MT, NV, OR, UT, WA, WY

How many people are in your household?

How many kids under the age of 10 years are in your household?

How many kids over the age of 10 years are in your household?

How many pets do you own that shed?

What's the approximate size of your home?

1) <1000 sq.ft.
2) 1001-1500 sq.ft.
3) 1501-2000 sq.ft.
4) 2001-2500 sq.ft.
5) 2501+ sq.ft

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Conjoint Analysis Survey Details:
Introduction text:
You will now be presented a few options of robotic vacuum cleaners on the basis of attributes:
 Brand
 Price
 Suction Power
 Noise Level
 Battery Life
 Charging Time
 Mobile App Control

In each scenario, please pick the option that you would be most willing to buy.

Here's a description of attributes and their levels that you will see in the next few pages.

Suction Power (levels): High - Can effectively clean all types of floors including thick carpets
Moderate - Can effectively clean hard floors and thin carpets but cannot clean thick carpets
effectively

Battery Life: This is how long (in hours) the robotic vacuum can run before it needs to be recharged.

Charging Time: This is how long (in hours) the robotic vacuum takes to be fully charged.

Mobile App Control: Your robotic vacuum can sync with your smartphone via WiFi and you can
then send commands to your robot using a mobile app. You can set a cleaning schedule, clean your
house, clean a particular spot, and get instant notifications about the status of the current vacuuming
run.

Full list of Attributes/Levels used in Conjoint Survey:

Brand
1) Black & Decker
2) iRobot Roomba
3) Dyson
4) Bissell

Price
1) $250
2) $400
3) $650
4) $900

Suction Power
1) High
2) Moderate

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Noise Level
1) Quiet
2) Medium
3) Loud

Battery Life (hours)

1) 1
2) 1.5
3) 2

Mobile App Control

1) Available
2) Not Available

Charging Time (hours)

1) 2
2) 3
3) 4

Number of conjoint questions asked: 19

Number of concepts presented per question: 3 plus “None” option

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